Apr 24, 2013
Forex Flash: Australia CPI lower than expected, RBA might ease in June – TD Securities
FXstreet.com (Barcelona) - Australia had quite a day today, with headline CPI up by 0.4% (disappointing consensus at 0.7%) and to be 2.5% higher than a year ago, or mid-RBA target. Core inflation also rose, by 0.4% or 2.4%/yr, “slightly lower QoQ rise but same YoY rise as consensus due to a slight upward revisions”. “Overall, leaves the RBA with a trigger to ease if required, but we believe June is better timing after a raft of high (retail sales and employment) and low frequency data (capex) can be digested”, wrote TD Securities analyst Annette Beacher, pointing also to RBA Deputy Governor Lowe’s speech about the growing financial ties between Australia and China. “While trade ties have been strong for a decade, financial ties have been much slower to gain traction. At least, two weeks ago direct trading between CNY and AUD on the onshore market was announced, where Loew says “Over time, this important initiative should promote trade invoicing in RMB and facilitate bilateral trade and investment””.